Chatting With IoT Startup Covacsis In A Slow-To-Convert India

“Few globally recognized Indian stalwarts advised us not to start this venture as they found it too audacious for an Indian entrepreneur,” says Tarun. But Tarun is adamant that IoT, cloud computing based solutions are the way forward. And they do have a few giant clients like Cisco, so things aren't completely grey. He is looking for another 30 million dollars to grow Covacsis. Investors, interested?

The gregarious nature of Tarun glosses over how frustrating it is to convince manufacturers to implement new technology in their old school factories. The journey of introducing smart technologies to the manufacturing industry in India has been a drawn out one peppered with more rejection than acceptance. Some of the rejections have come from the biggest software makers you can imagine and that must be even more disheartening.

“Few globally recognized Indian stalwarts advised us not to start this venture as they found it too audacious for an Indian entrepreneur.” Tarun says.

But Tarun is adamant that IoT, cloud computing based solutions are the way to make smart factories and smart offices that will get Make In India to its GDP goals for manufacturing.

Tarun Mishra, founder and CEO of Covacsis Technologies, is incredibly proud of his company’s IoT platform replete with a trademarked name, The Intelligent Plant Framework™ (IPF). It’s their “state-of-the-art platform that provides 360° visibility of the manufacturing floor in real time.”

Say for example, you’re a floor manager of a factory. Covacsis’ platform can help monitor performance of equipment and infrastructure, analyse why a production belt may have stopped, what machines are occupied and operating, and a host of other functions.

Covacsis claims that they can help increase cumulative returns by over 1000 percent by giving you real time data.

The key words here are real, time, data. It’s like cricket score updates. You want them as it happens, because what’s the point of keeping track after the match is lost, amiright?

Why did you decide to start this venture?

Covacsis was started in 2009 with my cofounder Abhijeet Mhatre and Santosh Mishra joined us in 2014.

During my initial stint in the manufacturing industry in 2008-09, I observed that factory performances are managed using old data. When performances at the factory floor are studied 3 months, 4 months or 12 months after they take place, it’s too late. Time pattern and nature of problem change on the shop floor in real time.

This absence of real time decision data leads to huge inefficiencies on the shop floor. There absolutely was a need to create a system to understand the operational and financial dynamics of the shop floor in real time.

Moreover, Indian manufacturing has a unique opportunity to leap-frog and set a new standard in next generation of manufacturing capabilities at the global level. Next generation of manufacturing is not going to be about automation or machineries or capital but it is going to be driven by software intelligence based on machine learning and artificial intelligence.

India produces the largest number of software engineers who could provide and support this transformation.

These make more than one reason to start Covacsis.

What’s special about Covacsis?

Our movement is all about freeing manufacturing from all hidden inefficiencies by using real time analytics and correction. We are committed to making our solution affordable for manufacturing organizations of all sizes.

Our solution is agnostic to sector, machines and control systems. Covacsis is serving to more than 12 sectors of manufacturing like pharma, cement, steel, chemical, textile, FMCG and automotive.

Covacsis is the product segment leader in India by number of customers, revenue, number of sectors, number of use cases, percentage of repeat business and ROI for customers. We trade far better against some of the large entities in this product-market segment.

This is an emerging space with gigantic potential so any further thinking about competition is too early and meaningless. We are focusing on sharpening our value proposition and go to market strategy.

Thinking about competition at this point will only trivialize the vision and mission of Covacsis.

How did you manage to fund this idea?

We boot strapped in 2009. We also took debt from a few friends. Few of our iconic customers believed in us enough to sponsor initial R&D. Blume Ventures acknowledged the potential in this space and invested in us in 2012. Cisco Systems and Gennext invested subsequently in 2014.

Covacsis will require approximately 30 million dollars of investment over the next 24-30 months to attain a top line of 120 million dollars in the next five to six years. Along with existing investors we will diligently continue to look for an investment partner who align with our long term vision.

What are/what will be your monetization paths?

That’s simple. Our flagship product, Intelligent Plant Framework will be our bread winner as we offer it as a service and spin it off in a perpetual licensing model.

Tell us how the business has grown so far

50 manufacturing companies out of the top 100 in India are using Covacsis solutions. Few of them have invested serious amounts in our solution across multiple locations with 4 lines of SKUs catering to different market segments.

What marketing strategies and plans are in place to grow the business?

We have partnered with Microsoft and Cisco and some other leading organizations. We will invest significantly in building our business network. Customer acquisition is key and I think we have been moderately successful in deploying our solution in international markets like Europe and Middle East.

But India, even with all its retrograde thinking remains our strategic focus market.

What is the market size and opportunity here?

Our estimation and research says that opportunity for our kind of product (i.e. manufacturing analytics) in India will be more than 14,000 crore over the next three and a half to four years.

Any challenges faced setting up?

Biggest problem is figuring out how to get money to develop product and business.

Lack of investors for B2B enterprise solution like ours is a big challenge. Lack of availability of debt compared to our counterparts doing the same thing in the US and Europe made our journey quite challenging and demands you to be monetarily creative every single day.

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